Weekly Update: “Sure Things”, Morningstar and Index Funds, Dollar Cost Averaging

We believe that an educated investor is a better investor; and even with a well designed financial plan, investors are constantly receiving mixed messages from numerous places.  With that in mind, starting today we’ll publish weekly updates with articles from various sources to help you make more informed investment decisions and to ignore the noise that surrounds the investment world.


Announcement: New Rules on Cost Basis Reporting

One of our goals at Lauterbach Financial Advisors is to keep you informed about changes that may affect your accounts. To that end, we want to inform you of a change in IRS reporting requirements for Form 1099-B that begins in 2011.

The 2011 1099-Bs that you will receive in early 2012 from any custodian (for example, Schwab, Fidelity or TD Ameritrade) will report the cost basis and gain or loss on the sale of equity securities. This applies to equity securities that were purchased in your account after December 31, 2010 and then sold on or before December 31, 2011.

Some of our custodians will soon begin to publicize this topic via supplements included in your monthly statements. We are working closely with them and from time to time will provide you with more information on these changes. If you have any questions, please contact us.

Stock Pickers are Having a Bad Time Picking Stocks. Why We are not Surprised.

One of the most common questions at the beginning of the financial planning process from prospects in El Paso and elsewhere is: what are your favorite stock picks? Our response is that stock picking or market timing doesn’t work, and we’re backed by decades of research. However, the hype and noise of Wall Street keep trying to persuade investors by pouring millions of dollars a year in advertising to showcase their “super star” managers and their latest “hot” stock picks.  

Here’s further evidence that supports our belief that active management doesn’t work.


Credit Concerns within the Municipal Bond Market

The media continues to be focused on budget and pension obligation problems within the municipal bond market. However, it is important to remember that default risk has been incredibly small in the municipal market. The following provides our take on the municipal bond market.


Video: What is the Best Strategy for Fixed Income Investing?

With all the news and fears about inflation and deflation, along with the possibility of rising interest rates and current market conditions, Jon Sonnen discusses with Larry Swedroe some ideas on how investors should focus their fixed income allocation. The discussion continues with the benefits of passive over active management in equity and fixed income portfolios.


Video: Should Investors Worry About Inflation?

In this video, Jon Sonnen and Larry Swedroe (Director of Research at Buckingham Asset Management and author of nine books on investing) talk about the role that inflation plays in an investor’s portfolio.


Delaying Social Security Benefits

You’re ready to retire and have paid a lot into the Social Security system. Now that you’re finally eligible for benefits, your advisor and other experts might be saying, “Not yet!” Why should you have to wait any longer?


A Perfect Storm

Investors are faced with a perfect storm of information overload, human emotions and market volatility. Following is a discussion of those threats to investors’ portfolios and a way to avoid the storm.


New Articles: July 6, 2010

We just added two articles to our article library:

The Risks of Fixed Income Investing

Current State of the Municipal Bond Market

You may download them directly from our article library.

Video: What is Wrong with Stretching for Yield?

In this video, Brian Haywood, Fixed Income Advisor at Buckingham Asset Management explains why stretching for yield with bonds may not be a wise idea.